Two of SFI Group's four executive directors wanted to resign in Sep-tember 2001 because they feared no one was heeding their warnings of "terminal damage" to the company if expansion continued, the Morning Advertiser can reveal.
Former joint managing director Clive Eplett and finance director James Kowszun tossed a coin to decide who would be first to tell chairman Tony Hill of their decision to go.
The pair had previously called a meeting with senior non-executive director Robert Lo to express their fears for the company.
In a two-page analysis, Eplett and Kowszun argued: "SFI has been running flat-out for far too long it needs to pause for breath, from strategic, management and funding viewpoints."
Eplett resigned soon after but Kowszun stayed after being promised, among other things, that an external chief executive would be appointed.
In the event, joint managing director Andrew Latham became chief executive in 2002 Kowszun resigned in February 2002 and left two months later.
SFI Group had overspent its budget by £16m by the end of July 2002 after opening more than 40 new sites.
Four months later it suspended its shares and two weeks ago shareholders were told their equity was worthless, with total debts at around £150m. The Financial Services Auth-ority (FSA) is investigating statements made by SFI Group between July and November last year.
A spokesman for the FSA said this week: "The inquiry is on-going and we have not settled on a time frame
[for its conclusion]."
A spokesman for SFI Group said: "We do not propose to comment on Mr Eplett's personal views and recollections."
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